Does it Pay to Remain with the Same Car Insurance Company?


With the huge competition among insurance companies these days, chances are you might be overpaying for your auto coverage right at this moment. Auto insurance comparison is, slowly but steadily, becoming an absolute must for budget-conscious shoppers.

The online car insurance market is seeing an increasing competition. Services offered by car insurance comparison websites are gaining a huge popularity and are a great alternative to the traditional cold calling. You no longer have to build a list of insurance carriers, look them up in Yellow Pages and call each company individually. You can simply plug in your ZIP code, get a list of active insurers in your area, select a few ones that have raised your interest, fill out an application form and -- pow! -- you get the quotes that you can compare head to head.

So does it pay to remain with the same car insurance company for longer periods of time? Chances are that you will always find another company that is going to offer you a better quote. There are some facts, though, that you will need to keep into account when deciding to move to another company for the sake of a few dollars saved:

  • Your comfort. Signing up for a new policy is easy these days. You can do it online, from the comfort of your home. But depending on how much you will save, it might not be worth the time spent. Do you want to switch providers just for the sake of the equivalent of a cheap meal? If you're going to save less than 10% on a very cheap policy, it could be that it's just not worth your while.
  • No more fidelity bonuses. The old insurance company might offer you a discount if you renew your policy with them. You may even get another 10% if you sign up a few months before the old policy expires. You aren't going to get such discounts if you switch to a new carrier.

When does it pay to switch providers then? Here are two scenarios:

  • Major savings. You should be the one to tell how much is enough. But savings in the range of $500 or more on a 6-months or 1-year policy might be worth taking into account.
  • Different insurance needs. If anything has changed about your situation -- like you got married/divorced, bought a new car or sold one -- you may find that another company can offer much better rates, so shopping around might be a good choice.

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